ITR Filing: The last date for filing Income Tax Return is fast approaching. Meanwhile, many employed people are unable to understand whether they should go to the new tax regime or the old one.
ITR Filing: The last date for filing Income Tax Return is fast approaching. Meanwhile, many employed people are not able to understand whether they should go to the new tax regime or the old one. In last year’s budget, the new tax regime has been made the default option. That is, those who have not informed their employer about choosing the tax regime, will be taxed according to the new tax regime. Let us know who should shift to the new tax regime and why.
First know what is the new tax regime
Under the new tax regime for the financial year 2023-24, there will be no tax on income up to Rs 3 lakh. At the same time, 5 percent tax will be levied on income up to Rs 3-6 lakh. You will have to pay 10 percent tax on income of Rs 6-9 lakh. 15 percent tax will be levied on income of Rs 9-12 lakh. You will have to pay 20 percent tax on income of Rs 12 to 15 lakh. At the same time, you will have to pay 30 percent tax on income of more than Rs 15 lakh. Let us tell you that if your income is up to Rs 7 lakh, then with the rebate your entire income will be tax free.
You get these 3 deductions
Under the new tax regime, the tax rate is very low, but the deductions are limited. Only 3 deductions are available in the new tax regime.
1- The first is standard deduction, under which salaried people get tax exemption up to Rs 50,000.
2- The second deduction is investment made in corporate NPS under 80CCD (2). Under this, employees of private companies can invest up to 10 percent of their basic salary and dearness allowance in NPS and you will get tax exemption on it. If you are a government employee, then this figure can be up to 14 percent for you.
3- Apart from this, the third deduction is made in Agnipath scheme under 80CCH. In this, whatever money is invested by the employee or the government in Agniveer Corpus Fund, it is tax free.
Who should shift to the new tax regime?
If you do not make many investments and are not taking facilities like saving-investment, insurance, medical, NPS etc. under the old tax regime, then the new tax system is better for you. Also, if you do not pay rent and you do not have a home loan, then also the new tax regime will be better for you. In the old tax system, tax exemption is available on all these things up to a certain limit, due to which it looks attractive, but if you do not take tax benefits on those things, then you will benefit by coming to the new tax regime and the income tax will be much less.
